Texas Can Still Pass Medicaid Expansion Even After Federal Health Care Cuts
The big budget bill that Congress passed earlier this year, HR 1, includes deep cuts to health care. But Texans should know that even after those cuts, Texas lawmakers can still adopt Medicaid expansion.
Health care experts at the Georgetown University Center for Children and Families recently released an analysis of what the budget bill’s Medicaid expansion provisions mean for states like Texas.
Here’s the short version of what changed and what remains the same:
The federal government will still cover 90% of the costs of Medicaid expansion.
Republicans in Congress made changes to Medicaid expansion — such as work requirements, more frequent renewals, and co-pays — that will likely reduce the effectiveness of Medicaid expansion and create huge bureaucratic headaches for states but could also make expansion more palatable to conservative states.
The budget bill’s new restrictions on “provider taxes” (which help finance health care in Texas and other states) are even stricter for Medicaid expansion states.
The limitations on provider taxes introduce a new balancing act in the financial impact of Medicaid expansion. If Texas lawmakers do expand Medicaid, the state will gain billions of dollars in Medicaid expansion funding — but also lose out on federal funding that won’t be sent to Texas to match state Medicaid revenue from provider taxes.
Even with the new limitations, Medicaid expansion would be a huge step forward for providing an affordable health insurance option to janitors, child care teachers, drivers, sales clerks, home health aides, and other US citizens with low-wage jobs that don’t offer health coverage.
Who would be covered by Medicaid expansion? It offers insurance to adults with incomes below 138% of the poverty level (about $44,000/year for a family of four, for example). KFF reports that over 1.1 million uninsured Texas adults would be eligible for insurance through Medicaid expansion if the state implemented it. About half of them are in the “coverage gap,” meaning they are ineligible for subsidies to buy coverage on HealthCare.gov because their income is below the poverty line (about $32,000/year for a family of four).
In Texas, Medicaid largely covers four groups: children, seniors in nursing homes, pregnant women (up to a year after their pregnancy), and people with significant disabilities. In the absence of Medicaid expansion, other adults in Texas typically only qualify for Medicaid insurance if they are parents and have extraordinarily low incomes — less than about $4,000 per year!
In other words, Medicaid expansion would offer a health insurance option to US citizen adults in a family of four making between $4,000 and $44,000 per year. A single adult would qualify with an income below about $22,000 per year. Expansion would provide a particular lifeline to adults who are in the health insurance “coverage gap”, meaning their income level is too low for them to qualify for ACA subsidies — such as adults in a family of four making between $4,000 and $32,000 per year. Right now, children under 19 in those families qualify for Medicaid; without Medicaid expansion, their parents don’t.
Texas currently has the highest uninsured rate in the nation, in large part because the state has not implemented Medicaid expansion. While 16.7% of Texans are going without insurance, there are much lower uninsured rates in nearby states that implemented Medicaid expansion, including Arizona (10.3%), Arkansas (9.4%), Louisiana (7.7%), New Mexico (10.1%), and Oklahoma (11.5%). Texas is one of just 10 states that has not implemented Medicaid expansion.
The Texas Legislature has voted down Medicaid expansion on multiple occasions, most recently in April 2025. The high-water mark for support was in 2021 when 76 of the 150 members of the Texas House co-sponsored a bill to draw down Medicaid expansion funding. Polling consistently shows high levels of support for Medicaid expansion in Texas. For example, this 2023 poll by the Texas Politics Project found that 73% of Texans backed Medicaid expansion.
The big budget bill passed by Congress this year certainly undermines Medicaid expansion. Nonetheless, Texas leaders still have the option to adopt Medicaid expansion as a way to help more than a million Texans get the health coverage they need.